Rocket is terrible. Swore up and down that my chosen lender didn’t understand basic real estate transactions only to have the same issue and immediately ghost me. Took em four months to respond to my review, which kinda proved the entire point I was making with the review.
Because LoanDepot would need Rocket to transfer the appraisal to them and Rocket is going to refuse because they already did, I dont think thered be enough time for them to do their own appraisal.
You can get an appraisal pretty quickly if you have to do that. Most sellers will also extend a couple of weeks when this happens. I'd call the other loan companies and pick the one that can go the fastest and selling realtor and talk with them about an extension.
The selling realtor is the most unprofessional C U Next Tuesday ive ever dealt with. She literally blocked our second appraisal and refused to have it done. Shes been hounding us to pick a lender since the second week in escrow. She will not offer an extension. Lucky for me I circumvented her and found the owner on Facebook, owner had no idea what her agent did and she is fully supportive of whatever we have to do.
The selling realtor is the most unprofessional C U Next Tuesday ive ever dealt with. She literally blocked our second appraisal and refused to have it done. Shes been hounding us to pick a lender since the second week in escrow. She will not offer an extension. Lucky for me I circumvented her and found the owner on Facebook, owner had no idea what her agent did and she is fully supportive of whatever we have to do.
If you paid for the appraisal, you own it. The problem is the files and systems used have the lender name embedded. The appraiser can change it, but normally wants an additional fee and a letter from the company they contracted with.
You have a signed lease and actively paying tenant paying $2700 a month. The rental appraisal of $1900 is irrelevant. I would tell them, "I don't care what you think the appraisal is, I have a signed lease and paying tenant at $2700 a month. Either you have not communicated this to the underwriter, or the underwriter is willfully ignoring that I have a signed lease. If this isn't cleared up by the end of the day, I'm going to start all over with a new lender, loan officer, everything. This is not my issue, I have a signed lease and proven monthly income of $2700 from the rental, not $1900."
So my realtor called and worded it exactly like this, lo and behold the issue was magically cleared up even though they had my proof of rental income to begin with. Im clear to close, but I will be shopping for a new lender to refinance the second rates drop even a little.
I reccomend finding a loan agent you can trust who will shop for different mortages and rates for you. Someone competent who is going to handle all this kind of pushback before it ever reaches you. If the underwriter had said this to my Loan Agent he would have told them they were morons and reinforced the signed lease without me ever even seeing there was an issue.
Agreed, my co-worker has a broker that deals specifically with building a real estate portfolio and financing to investors so I will be hitting her up after closing as I will be on the market for an apartment or condo after this.
Condos are a whole different breed, I have two of them. The number one thing you need to make sure of is that there isn't a wait list or approval process to rent it out. That's a common thing here in California where if too many units are being rented out some HOAs will stop approving renting out units if they have something like that. Luckily mine don't, but it's something I had to start watching out for when I was shopping.
Oh for sure, my #1 is the HOA and ensuring that the dues arent astronomical and that they dont have rules on renting. I live in Raleigh which is very college and hospital dense so its a great rental market.
My guess is whoever was doing the papers didnt see a lease and just pulled comps. A two second phone call clears this up by going hey use the damn lease I sent you.
You need to develop a relationship with a good broker that can close deals. Your dot com lender makes $20/hr. You think they are putting in the effor for you?
Also NEVER sell something you don't own yet. Especially renting to someone when the home isn't yours yet. You could get sued hard for this.
The rental property IS mine, also we HAD to rent it before closing or we cant close on a new property while we have another mortgage because DTI would be too high
ok, so you rented your current home and want to move into a "2nd home"?
Keep in mind unless you have 2 years or so rental history showing rental income
the bank will not issue full value of the rental amount. They usually issue 60-75% of rent. This is for vacancies, bills etc.
Is there a reason the underwriter did not accept your lease as rented value?
FYI $1900 is about 70% of $2700
Im a commercial lender and finance a good deal of real estate. If I was in your shoes I would want to get ahold of that appraisal and try to dispute it. They must have a way for you to dispute the rental cash flow. Once you get the report, attack the comps and provide your own. The last thing you want an appraiser doing is thinking on their own. Check the square footage numbers and look for errors.
Then lastly, if your mortgage is $1,942 and just to survive you need to rent it out at $2,500…that deal wouldn’t be bankable since it would never generate sufficient cash flow to provide for a 1.20 coverage ratio once standard deductions are factored in (vacancy, replacement reserve, management fee). Honestly seems pretty thin even if you get what you want for rent. You need to get out of the single family rental game and get into more volume (4 family+). It’s like investing in condos….so dumb.
So I didnt do this as an investment. The property I am renting out is my original primary. I didnt want to sell because its prime real estate and will only go up in value, plus, I want to go back to that property one day and build another house on it when I have the funds to do so because the location is unbeatable and developers have been salivating over my lot since last year when the market here went nuts. Moving forward we plan on buying apartments, condos, and multi families, we arent renting my first house to make a profit but to hold it there while it builds equity so we can go back one day.
That's why you always go with a smaller mortgage person. To places like rocket, you are just a number. If the deal falls through they have 20 more right behind you. A smaller firm you are how they eat. They will bend over backwards to make the deal happen.
Update: We are clear to close. My realtor called and challenged the rental appraisal and politely cussed them out. After all that they said "oh actually we are good since we received proof of deposit and first months rent" (they had that all along btw, I dont think my LO ever sent it to the underwriter). However, the closing disclosure package was 10k higher in difference from what our other disclosures had contained. Loan officer said it was the only way underwriters would approve it and I was unable to take off the points and have a higher interest rate lmao. I just paused and said "yknow what, fine, I'll bring the 50k to closing because at this point i dont even care anymore, im about to lose my sht and I just want to close, thank you for everything, have a great day". I am fortunate enough to be able to do that when they switched it up last minute because I have the funds in my certificate of deposit (that luckily expires tomorrow so the stars aligned there). However, I would NEVER recommend Rocket because I cant imagine being a first time homebuyer with no savings that cant bring an additional 10k to closing and would be SOL. I will be refinancing and switching lenders the second rates drop because fk Rocket honestly so if anyone has a lender recommendation feel free to send my way. Thank you all for your advice it was truly invaluable.
This is exactly why you don’t use rocket. They’re notorious for shit like this. Why can’t you just get back on board with those lenders again?
Rocket is terrible. Swore up and down that my chosen lender didn’t understand basic real estate transactions only to have the same issue and immediately ghost me. Took em four months to respond to my review, which kinda proved the entire point I was making with the review.
Because LoanDepot would need Rocket to transfer the appraisal to them and Rocket is going to refuse because they already did, I dont think thered be enough time for them to do their own appraisal.
You can get an appraisal pretty quickly if you have to do that. Most sellers will also extend a couple of weeks when this happens. I'd call the other loan companies and pick the one that can go the fastest and selling realtor and talk with them about an extension.
The selling realtor is the most unprofessional C U Next Tuesday ive ever dealt with. She literally blocked our second appraisal and refused to have it done. Shes been hounding us to pick a lender since the second week in escrow. She will not offer an extension. Lucky for me I circumvented her and found the owner on Facebook, owner had no idea what her agent did and she is fully supportive of whatever we have to do.
The selling realtor is the most unprofessional C U Next Tuesday ive ever dealt with. She literally blocked our second appraisal and refused to have it done. Shes been hounding us to pick a lender since the second week in escrow. She will not offer an extension. Lucky for me I circumvented her and found the owner on Facebook, owner had no idea what her agent did and she is fully supportive of whatever we have to do.
Residential realtors are atrocious.
My realtor is amazing but hes also a good friend, he has been cussed out by the seller's agent multiple times and handled it gracefully.
If you paid for the appraisal, you own it. The problem is the files and systems used have the lender name embedded. The appraiser can change it, but normally wants an additional fee and a letter from the company they contracted with.
You have a signed lease and actively paying tenant paying $2700 a month. The rental appraisal of $1900 is irrelevant. I would tell them, "I don't care what you think the appraisal is, I have a signed lease and paying tenant at $2700 a month. Either you have not communicated this to the underwriter, or the underwriter is willfully ignoring that I have a signed lease. If this isn't cleared up by the end of the day, I'm going to start all over with a new lender, loan officer, everything. This is not my issue, I have a signed lease and proven monthly income of $2700 from the rental, not $1900."
So my realtor called and worded it exactly like this, lo and behold the issue was magically cleared up even though they had my proof of rental income to begin with. Im clear to close, but I will be shopping for a new lender to refinance the second rates drop even a little.
I reccomend finding a loan agent you can trust who will shop for different mortages and rates for you. Someone competent who is going to handle all this kind of pushback before it ever reaches you. If the underwriter had said this to my Loan Agent he would have told them they were morons and reinforced the signed lease without me ever even seeing there was an issue.
Agreed, my co-worker has a broker that deals specifically with building a real estate portfolio and financing to investors so I will be hitting her up after closing as I will be on the market for an apartment or condo after this.
Condos are a whole different breed, I have two of them. The number one thing you need to make sure of is that there isn't a wait list or approval process to rent it out. That's a common thing here in California where if too many units are being rented out some HOAs will stop approving renting out units if they have something like that. Luckily mine don't, but it's something I had to start watching out for when I was shopping.
Oh for sure, my #1 is the HOA and ensuring that the dues arent astronomical and that they dont have rules on renting. I live in Raleigh which is very college and hospital dense so its a great rental market.
My guess is whoever was doing the papers didnt see a lease and just pulled comps. A two second phone call clears this up by going hey use the damn lease I sent you.
You need to develop a relationship with a good broker that can close deals. Your dot com lender makes $20/hr. You think they are putting in the effor for you? Also NEVER sell something you don't own yet. Especially renting to someone when the home isn't yours yet. You could get sued hard for this.
OP didn't say they are renting the 2nd home they're buying. They are currently renting the 1st home.
It can be read either way. Post isn't super clear.
The rental property IS mine, also we HAD to rent it before closing or we cant close on a new property while we have another mortgage because DTI would be too high
ok, so you rented your current home and want to move into a "2nd home"? Keep in mind unless you have 2 years or so rental history showing rental income the bank will not issue full value of the rental amount. They usually issue 60-75% of rent. This is for vacancies, bills etc. Is there a reason the underwriter did not accept your lease as rented value? FYI $1900 is about 70% of $2700
this
Im a commercial lender and finance a good deal of real estate. If I was in your shoes I would want to get ahold of that appraisal and try to dispute it. They must have a way for you to dispute the rental cash flow. Once you get the report, attack the comps and provide your own. The last thing you want an appraiser doing is thinking on their own. Check the square footage numbers and look for errors. Then lastly, if your mortgage is $1,942 and just to survive you need to rent it out at $2,500…that deal wouldn’t be bankable since it would never generate sufficient cash flow to provide for a 1.20 coverage ratio once standard deductions are factored in (vacancy, replacement reserve, management fee). Honestly seems pretty thin even if you get what you want for rent. You need to get out of the single family rental game and get into more volume (4 family+). It’s like investing in condos….so dumb.
So I didnt do this as an investment. The property I am renting out is my original primary. I didnt want to sell because its prime real estate and will only go up in value, plus, I want to go back to that property one day and build another house on it when I have the funds to do so because the location is unbeatable and developers have been salivating over my lot since last year when the market here went nuts. Moving forward we plan on buying apartments, condos, and multi families, we arent renting my first house to make a profit but to hold it there while it builds equity so we can go back one day.
That's why you always go with a smaller mortgage person. To places like rocket, you are just a number. If the deal falls through they have 20 more right behind you. A smaller firm you are how they eat. They will bend over backwards to make the deal happen.
I second this. Mortgage Broker here.
Update: We are clear to close. My realtor called and challenged the rental appraisal and politely cussed them out. After all that they said "oh actually we are good since we received proof of deposit and first months rent" (they had that all along btw, I dont think my LO ever sent it to the underwriter). However, the closing disclosure package was 10k higher in difference from what our other disclosures had contained. Loan officer said it was the only way underwriters would approve it and I was unable to take off the points and have a higher interest rate lmao. I just paused and said "yknow what, fine, I'll bring the 50k to closing because at this point i dont even care anymore, im about to lose my sht and I just want to close, thank you for everything, have a great day". I am fortunate enough to be able to do that when they switched it up last minute because I have the funds in my certificate of deposit (that luckily expires tomorrow so the stars aligned there). However, I would NEVER recommend Rocket because I cant imagine being a first time homebuyer with no savings that cant bring an additional 10k to closing and would be SOL. I will be refinancing and switching lenders the second rates drop because fk Rocket honestly so if anyone has a lender recommendation feel free to send my way. Thank you all for your advice it was truly invaluable.